Objectives of compensation

Compensation has some important objectives. To achieve, these objectives a well conceived compensation scheme or plan may be established. These objectives are mentioned in the following point.

1. To be legal: It must get approval from the govt. or top management in the organization.2. To be adequate:Compensation must be sufficient so that needs of the employees are fulfilled substantially.3. To be Motivational:Compensation must increase the level of motivation and job satisfaction of the employees.4. To be equitable:Compensation policy should be declared in such a way so that no discrimination can be observed.5. To provide security: Employees must have guarantee of getting wages or compensation regularly without any break.6. To be cost benefit effective: The organization must make a balance between cost for giving compensation and benefits to be accrued from the employees.